Purchasing a home or investment property in this day and age can seem like a pretty straight forward process, especially when your friends and family describe the process as a few simple steps. What they sometimes fail to mention, is that there are certain pitfalls that could cost you a significant chunk of change or even losing the property. This is where going ahead with the purchase with a mortgage broker will come in handy.
A mortgage broker acts as the go between for the clients (borrowers) and the lenders. The mortgage broker is there to essentially make the process of the entire loan journey from initial enquiry to the actual settlement a walk in the park. The heavy lifting is to essentially be left to the broker while the client is able to deal with more pressing issues on hand.
One of the biggest benefits of working with a mortgage broker is the experience of knowledge of dealing with banks and lenders on a daily basis, having a good understanding of the market and the lending products. In this day and age, information is readily available and accessible to any individual looking for it. There are search engines and various lending products that can easily overwhelm the client. Which lender do I go with, what type of loan structure works best for my situation, should I be on interest only, and if so for how many years? Think about how often you are stuck looking a movie to watch for the night when you are browsing on Netflix or Disney, how long does it take to look for a movie and you are also pleased with your choice as well by the end of the night.
When you work with a mortgage broker, you are working with an expert adviser. The mortgage broker will get a deep understanding of what you are looking to do, your needs and goals before recommending the right product for you. Mortgage brokers are not incentivised to sell a specific product, only the right one that is tailored for your specific situation. A very different experience rather than walking to a bank and having the staff “help” you. They are limited to the products of the specific bank that they work for, unlike mortgage brokers that have a vast network of lenders, including major banks, credit unions, private lenders, and non-traditional financial institutions.
Because brokers already have solid relationships with lenders, they can snag you competitive rates and better terms. When you work with a broker, you tap into those exclusive deals. A small interest in savings over a large loan size over your lifetime will save you more than you think.
Personalised And Simplified
Remember the Netflix comment about having all the choices and wasting hours looking for the right movie or show to watch. Sometimes we do in fact pick the wrong to watch and we leave disappointed and felt liken it might have been a waste of time. Is that something you want to be taking a risk with a product you think you might need at the time, but turns out to not really be suited for your specific situation. This is where working with a mortgage broker will come in handy. They will be able to provide personalised service and recommendations for products tailored to your specific needs and situations that meet your overall short term and long term goals.
Not only are you getting advice on which products will fit your specific needs and goals, working hand in hand with a mortgage broker will also simplify the process for you. They collect the same documents that the lenders collect and work hand in hand with the lender to move the application quicker. With the experience and relationships built with the broker and the lender the broker is also able to get better terms sometimes not available to the public.
Your mortgage broker will also make the process easy by working with the real estate agents, the solicitors and the bank directly for any paperwork that can be dealt with on the broker’s end, freeing up more time for you to get on with your day and dealing with multiple people at once.
Less Stress, Less Fees
Buying a home is a big deal and can be pretty stressful. A mortgage broker can take care of all the tricky mortgage stuff for you, and they’ll keep you in the loop the whole time. You don’t really want to spend your time calling and emailing everyone involved and trying to get up to date on the timeline with what is going on, who is doing what and if there is anything outstanding. With a mortgage broker working by your side, this won’t be an issue at all.
The mortgage world can be a lot to take in with all the loan types, features, and jargon. A lot of your time may be wasted researching and comparing the different choices that you have available you. There is no need to waste your time walking down that road when there is no real need to is there? Mortgage brokers help by breaking it all down into easy, side-by-side comparisons. They’ll walk you through the fine print, terms, and conditions so you actually get what each loan offers—and where it might fall short. End of the day, why do all the work when there is a trusted professional to do it for you.
Now you might be wondering, with all the benefits and services provided, it must be expensive to have a broker, will the benefits of having a broker outweigh the costs of going with one, can I just do this myself and save myself a bit of money. The good news, is that broker’s typically don’t charge a fee for their services, they are paid a commission when the loan settles. Don’t just take my word for it though, ask the broker before proceeding with the application. If they do charge a fee however, I wouldn’t want to work with a broker that is essentially double dipping, but each to their own.
Mortgage Broker Engagement Checklist:
A mortgage broker can make getting a home loan easier and bring helpful benefits. Before you decide, look over this checklist to understand the advantages of using a broker:
Lender Access
- Get a understanding of lenders available to your situation.
Personalised Service
- Let the broker give you advice for situations tailored to you.
- Leverage on the broker’s expertise
Time Savings
- The broker will push the deals as fast and as efficiently as possible.
- Confirm if the broker handles research, documentation, and submission on your behalf.
Cost Efficiency
- Understand how brokers get paid, typically they shouldn’t be charging you for a straightforward case.
- Compare savings on interest rate provided by the broker.
Exclusive Deals
- Some brokers have lenders on their panel and relationships gets you access to deals not available to others.
- Understand how the broker’s relationships with lenders can benefit you.
Loan Comparison
- Let the broker present to you the differences in product and lender.
- Ensure all terms of the loans are explained to you clearly.
Support During Settlement
- Confirm the broker will be there for the end process as well, it should be a no headache solution for you.
- Ensure they act as a liaison between you, the lender, and other professionals involved. Again this should mean the broker does all the heavy lifting.
Client Reviews and Testimonials
- Client reviews are a great starting point for expectations on the services you will receive.
Qualifications and Accreditation
- Ensure the broker is qualified, licensed, and accredited.
Long-Term Relationship
- Consider the ongoing relationship you will have with the broker, as it will not be a one time deal. There will always be refinances and better loan terms in the future. The broker should be doing annual reviews to see if you are still on the best deals.
- Assess how they will be looking after you in the future.
By looking at this checklist effectively, you will be able to make an informed decision on which is the best path available for you. Let the broker do all the heavy lifting.